- This is an excerpt from a story delivered exclusively to Business Insider Intelligence E-Commerce Briefing subscribers.
- To receive the full story plus other insights each morning, click here.
Italy’s competition authority will start an investigation into whether Amazon improperly leverages its strong position in e-commerce and logistics, specifically if it gives merchants using its logistics services advantages that it doesn’t offer others, according to CNBC.
Business Insider Intelligence
The investigation will take a year to finish and will look into the operations of five different Amazon companies: Amazon Services Europe, Amazon Europe Core, Amazon EU, Amazon Italia Services, and Amazon Italia Logistica.
Here’s what it means: A number of government officials and bodies have been raising concerns about Amazon’s business practices that take advantage of its dominant standing, which could potentially force it to change its operations.
Government officials in the EU and US are interested in looking into whether Amazon is abusing its market position.In addition to the actions being taken by Italy’s competition authority, Germany’s competition regulator has launched its own investigation into Amazon’s relationships with third-party sellers on its marketplace and the European Union is considering initiating a full probe into Amazon’s data practices surrounding those same relationships.
Meanwhile, in the US, 2020 Presidential candidate Senator Elizabeth Warren (D-MA) has proposed breaking up portions of Amazon’s business and preventing marketplace operators from selling on their own platforms, while Senator Richard Blumenthal (D-CT) wrote a letter to the US Department of Justice (DOJ) in December that asked it to investigate antitrust concerns about Amazon.
This mounting interest in Amazon’s actions could lead to fines and new regulations on the company in a number of markets that will prove costly to its business.
The bigger picture: Despite this risk, it’s very possible that Amazon will emerge unscathed, or at least relatively unharmed, from this surge in interest in its operations.
Amazon is already working to combat this scrutiny by changing its practices and pointing to the success third parties find on its marketplace, which may help it weather this wave of criticism. The e-tailer has recently rolled back a restrictive pricing policy and stopped pushing its private labels as heavily, and CEO Jeff Bezos discussed third-party vendors’ success on Amazon in the company’s annual letter to shareholders, all possibly to lessen the scrutiny it’s facing.
This may have the company’s desired effect, but even if it does face regulation and is broken up, Amazon may survive just fine. Bob Phibbs, CEO of New York-based consultancy The Retail Doctor, commented on the matter to Business Insider Intelligence, saying, "The whole may be greater than the sum of its parts, but you better believe the parts would be pretty strong on their own.
As for Amazon itself, if anything was to change it’s unlikely it would last in the long run. AT&T is a great example: The business was broken up in the ’80s but not long after, the parts were all bought up and came together again. I would expect nothing less from Amazon."
Interested in getting the full story? Here are two ways to get access:
1. Sign up for the E-Commerce Briefing to get it delivered to your inbox 6x a week. >> Get Started
2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to the E-Commerce Briefing, plus more than 250 other expertly researched reports. As an added bonus, you’ll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now
- Amazon is beset by false product reviews
- Amazon now lets Prime customers schedule orders for the delivery day of their choice — and it’s a total game changer
- New in-store technologies could bring about stricter regulations